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California’s fuel crisis threatens Orange County’s economic engine

August 23, 2025

California’s economy is at a crossroads. With two major refinery closures looming, the entire state is bracing for a substantial reduction in critical refining capacity. Experts predict these closures will spike gas prices in the coming months. For businesses and working families alike, California’s fuel supply crisis is actually an affordability crisis. And the economic consequences for Orange County businesses and families are alarming. The California Energy Commission (CEC) projects a 15–30¢/gallon further increase in gasoline prices in the short-term following the shutdowns.

Orange County Business Council has long advocated for multiple sources of energy to support further growth of our economy. And we have sounded the alarm about avoidable pressures which are driving up fuel costs in California. The results are all too predictable with a regulatory environment that discourages local oil production and hampers the economics of refining to the point of now facing refinery closures. Higher prices at the pump, higher costs for goods and services and a growing reliance on imported fuel from foreign countries many of whom are dismissive about environmental concerns.

But in recent months, we have seen a notable shift in tone from our state legislative delegation. Assemblymember Cottie Petrie-Norris deserves credit for hosting a critical oversight hearing that brought transparency and urgency to this issue. Her leadership, and that of others in the Orange County delegation, signals a growing understanding in Sacramento of the economic magnitude of this challenge. The seriousness behind the questions from the dais deserves recognition and reflects genuine engagement with the issue.

Working openly with our Orange County delegation, we are encouraged by their responsiveness. They are acknowledging the real-world impacts of refinery closures and the policy constraints that have led California to this point. They understand how these affordability issues harm our most vulnerable communities and businesses. Most importantly, they are beginning to chart a path forward and we are proud to work with them.

However, words must now translate into urgent action because of what is at stake.

Orange County is not just a beautiful place to live. It’s also one of the most economically dynamic regions in the country. With more than 3.2 million residents and a GDP exceeding $333 billion, our local economy is more robust than those of 25 other states —underscoring the county’s role as a global economic engine fueled by thriving industries like advanced manufacturing, life sciences, technology and tourism.

These sectors depend on reliable, affordable fuel to move goods, serve customers and support workers. Rising gas prices threaten to undermine the economic “fuel” driving growth and prosperity in one of the most desirable places to live and work in the world – a region that is already combating increased costs of living.

For small businesses, higher transportation costs mean tighter margins and higher prices for customers. For working families in a largely car-dependent region, elevated fuel prices strain already-stretched budgets.

We respectfully call on lawmakers to advance the policy reforms that match both the urgency of the moment and their authentic concerns.

Specifically, we call on the Legislature to:

Repeal the refinery margin cap law, which discourages investment in refining infrastructure.
Repeal the minimum inventory law, which adds unnecessary costs and complexity to fuel supply chains.
Enable responsible local crude oil production, reducing our reliance on highly emitting imports and supporting California jobs.

These are not radical proposals. They are pragmatic steps that reflect the economic realities facing all Californians.

We understand the importance of moving toward a cleaner energy future. But we also believe California can be a climate leader without sacrificing energy affordability and reliability. Important elements in our ability to be economically competitive.

Jeff Ball is president & CEO of the Orange County Business Council.

Orange County Register

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California’s fuel crisis threatens Orange County’s economic engine

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